Broker’s disconnected phone leaves homeowners short on interest

It took a while for Bob and Susan Rivers to agree that they should sell their cozy waterfront cottage on Warner’s Lake.
It had been a welcome getaway spot for both of them since 2003, the year Bob retired from his job as a landscape architect at the state Department of Transportation.
The year-round cottage was an easy drive from their main home in Ravena and a reasonable commute to work for Susan, who had a job as an environmental planner in Albany at the time. She also set up a quilting studio in the basement-level family room for her business, Greentree Fiber Arts, and relishes her time designing and sewing there.
But Bob has grandchildren spread around the country and has been itching to travel more. That just wasn’t possible as long as the couple was maintaining a second home.
So last October, while there still were a few weeks of autumn remaining, they put the house on the market. For a variety of reasons — including the attractive lakeside setting and Bob’s availability to show the property himself — they opted not to sign on with a traditional real estate brokerage.
Instead, they signed a limited-service contract with a broker who they understood to be a local representative for a national company called Flat Rate Realty.
The couple paid Bret McArthur $395 to place photos and details about the lake house on the Capital Region Multiple Listing Service, which is only available to licensed real estate professionals. McArthur also placed a sign with the Flat Rate Realty logo and a contact phone number next to the house so he could field calls from interested buyers and put them in contact with Bob.
Then, they waited. And they waited some more.
They showed the house a couple of times to people who saw ads they placed independently in the Times Union and on Craigslist, but they recall only one bit of interest stemming from the listing McArthur arranged. Bob rushed back from Boston after a New Year’s Eve message saying a potential buyer wanted to take a look, but nothing came of the single brief showing.
By spring, Bob and Susan Rivers were scratching their heads in puzzlement about the near-total lack of interest or contact from McArthur. Even in a soft market, they figured there would be at least a few folks whose interest was piqued when they drove by or some real estate agents scanning the listings for lakefront property.
“We were getting a little nervous because we weren’t getting any bites at all,” Bob said as we chatted over coffee at their kitchen table overlooking the water.
“We’re thinking: what did we do wrong?” Susan recalls. “Is it the winter? Is it the price? Is it how we worded (the listing)?”
They decided to contact McArthur about freshening up the MLS entry, which they were unable to access, but they got no response to the messages they left on the cell number he had given him. Then, they tried the number posted on their For Sale sign and were stunned to hear a recording saying it was out of service.
“That’s when the light came on,” Bob said. “It’s not the price. It’s the fact that there’s nobody answering the phone. There had to be other real estate agents with people wanting to buy lakefront property and no way to reach us.”
Their conclusion was reinforced when they put up a new sign with their own phone number listed as a contact point for the three-bedroom, two-bath house, which now has an asking price of $239,900.
“We had five calls in three days,” Bob reports.
But even though they’re hopeful that they are back on track toward an eventual sale, Bob and Susan can’t quite shake the irritation that they spent months carrying the continued expenses and burdens of maintaining the cottage — including taxes, utilities and upkeep — while they believed it was on the market.
“We are uncertain how many potential buyers we may have missed — and discouraged — by not having a working number” with the listing, said Bob. “It’s not just the $395. It’s that we could have sold it, maybe, if we had an active listing or an active Realtor to receive the calls. Those are the costs we’re more frustrated over.”
As soon as I started doing a little research into McArthur’s credentials, it became clear that the couple had good reason to be upset. They were dealing with a broker who lacked a valid affiliation with the company he claimed to represent and was under investigation for misconduct that ultimately would result in suspension of his state license.
According to Thomas Moulding, the president and owner of California-based Flat Rate Realty, McArthur’s relationship with his business was severed more than two years ago, and the national company no longer operates in New York state.
As a result, McArthur was not authorized to represent Flat Rate, use the company’s signs and logo or conduct business on behalf of the national company when Bob and Susan Rivers signed their contract in October.
At one time, McArthur was planning to buy a Flat Rate franchise and even become a district manager to sell franchises, Moulding said, but that never happened.
“I got used and abused, and I never collected a dime from (him),” Moulding said.
According to the Division of Licensing Services at the state Department of State, McArthur’s license as a real estate broker is currently suspended.
The department’s Albany Enforcement Unit investigated complaints filed against him in 2004 and 2009, issuing a “letter of instruction” as a result of the 2004 inquiry and filing formal charges as a result of the more recent complaint.
McArthur, 43, paid a $500 fine and surrendered his broker’s license, effective Feb. 23, said Lisa MacSpadden, a spokeswoman for the Department of State.
The 2009 complaint stemmed from an $1,800 unpaid rent bill for office space, and the suspension followed McArthur’s failure to comply with a state Supreme Court directive to pay the back rent, said Whitney Clark, an associate attorney with the agency.
While the incidents weren’t related to his representation of clients in real estate matters, they demonstrate a failure to meet professional standards of trustworthiness and character, said Michael Elmendorf, chief investigator with the department’s licensing division.
McArthur’s license would be reinstated if he complies with the court order, Clark said, but a new complaint received from Bob Rivers will be investigated and could result in new disciplinary action.
Records show McArthur listed the Rivers house on the MLS on Oct. 18 and withdrew it from the system on Jan. 10, said James Ader, chief executive officer of the Greater Capital Association of Realtors. But McArthur’s GCAR membership lapsed in March, Ader said, and he no longer has the ability to post listings as a result.
I reached McArthur on his cell phone to offer him an opportunity to comment, but while I was explaining who I am and why I was calling, the call was disconnected.
Bob Rivers has filed a complaint with the Department of State but has little hope of receiving any compensation for losses and trouble stemming from his contract with McArthur. He and Susan said their chief hope is that filing the complaint and sharing their story with The Advocate will help spare others from being duped.
“I’m not trying to seek any money or damages. I just don’t want other people to have to go through this,” Bob Rivers said.

8 Responses

A classic case of why trying to save a little money often costs you much more in the long run. Why didn’t they just select a reputable full-service real estate agent who could have marketed and probably sold their house last year? Penny wise and pound foolish.

Unfortunately, you usually get what you pay for. There really isn’t much of a middle ground in selling property. Either go with a full service broker, or go FSBO and deal with the headaches yourself to save a few bucks. Actually, I’m shocked that they let the situation go as long as they did. I get that it was a second property and they weren’t in a particular rush, but how do you let 4-6 months go by before you start asking questions?

Or maybe the MLS should be available to everyone. I don’t need someone’s help to sell my car, why do I need someone’s help to sell my home? If someone is smart enough to own and maintain a home, I bet they are smart enough to sell it, too.

If private individuals could list on the MLS, good people like the Rivers could avoid these types of situations.

This is a typical case of “you get what you pay for” But there is a part that confuses me. It shouldn’t have mattered what number was on his sign except for drive by’s perhaps. When I sold my last home, when other Realtors wanted to show it my Realtor didn’t call me. I was contacted by a company that works for all real estate companies so you should have still gotten showings unless there was just no interest. For future reference the 5% I paid my Realtor was well worth avoiding the headaches.